Stride and Tesla Gain, but CE 100 Slips 1.4% Amid Market Volatility

And now earnings season is here, in full swing, and a series of double-digit advances and declines among our CE 100 population wound up sending the overall Index 1.4% lower. The markets, in general, were volatile too, as only the tech-heavy Nasdaq was up by 0.1%

Stride was a standout for the CE 100, as the stock leaped 41%, propelling the Live segment to 0.7% higher.

Revenues at the education FinTech were up 14.8% to $551.1 million, ahead of estimates by as much as $45 million.  Enrollment grew 18.5% year over year to about 222,600, with Career Learning up 30.4% to more than 91,000. The company noted that revenues per enrollment were 0.5% higher year on year.

Tesla’s stock surged nearly 22%, boosting the Move segment by 1.8%.  Tesla’s own results noted that revenues, at $25.2 billion, were 8% higher than last year.  CEO Elon Musk said on the conference call that vehicle deliveries could increase by between 20% and 30%, whereas analysts had been, as sites such as CNBC reported, expecting 15% growth next year.

Musk also said the company is eyeing to start production on the Cybercab by the end of 2026.  PYMNTS reported earlier this month that with the Cybercab, Tesla “hopes to reshape urban transportation with its sub-$30,000 price tag and $0.40 per mile operating cost. However, as Tesla aims to usher in an era of driverless taxis, tall hurdles remain, including perfecting the technology, navigating regulation and building the necessary infrastructure for charging and maintenance.”

Banks and Payment Names Move Lower

Overcoming those gains — and helping send the Index lower — the Banking segment of the CE 100 slipped 1.2%, as J.P. Morgan, Citi, and Goldman, which had already reported earnings earlier in the month, were down by low single-digit percentage points.  

LendingClub bucked that trend, up 7.6% after earnings this past week. LendingClub’s latest quarterly results showed an acceleration of loan originations, and banks have moved back to the company’s platform as consumers look for ways to consolidate and pay down debt — particularly credit card debt.

The company’s earnings supplementals indicated that loan originations were up 6% sequentially to $1.9 billion, where that tally had been $1.5 billion in the third quarter last year, up nearly 27%.

The company’s balance sheet has grown by 25% since the beginning of the year, to $11 billion in total assets — and a quadrupling since the company acquired Radius Bank at the beginning of 2021.

“Credit remains strong, and we continue to consistently perform 40 to 50% better than our competitive set across the core consumer segments we serve,” CEO Scott Sanborn said on the earnings call. The company materials detail, for example, that 30-day delinquencies in the FICO band from 660 to 719 were 2.4%, whereas the peers were recently at 4.4%.

The Pay and Be Paid Segment Slides

The Pay and Be Paid segment of the CE 100 Index was 3.1% lower, led by the Buy Now, Pay Later companies Affirm, down 8.5%, and Sezzle, which lost 5.5%. 

As PYMNTS reported, the Financial Technology Association has sued the Consumer Financial Protection Bureau, stating that the new rule governing BNPL must be “set aside,” as new obligations — extending the same disclosure practices that are hallmarks of credit cards because BNPL providers will now be classified as credit card providers — are “ill-fitted” for BNPL products.   

Affirm and Klarna, reached by PYMNTS earlier this week, declined comment. Affirm’s own commentary letter posted by the CFPB in July states, among other things, that with “account opening-disclosures, it is not clear what content BNPL providers must include in periodic statements, if any.”